Long-term care in 2022: what the government has got planned

 28 February 2022
Long-term care in 2022: what the government has got planned

In September 2021, the government set out a new plan for adult social care in England. The main aims are to:

  • Support the NHS
  • Reform adult social care
  • Create a new integrated system between health and social care

Whilst much of the Build Back Better plan is about health and social care, it impacts on long term care provisions too. The main headline if you’re approaching retirement and trying to assess the potential cost of long-term care is the new cap on social care costs.


The social care cap

From October 2023, anyone in England will not have to pay more than £86,000 on their personal care during their lifetime. However, the devil is in the detail here.

The cap applies only to the cost of personal care, not the daily living costs of residential care. So, the cap only applies to “eligible personal care costs.” If people want to “top up” care costs and pay the difference, then this extra will not count towards the cap.

In other words, the cap covers the basic level of care. The rest is up to you to fund. That’s why estate planning for long-term care is so important. None of us can rely on being fit and healthy for the 30+ years after we retire. Inevitably, our health and mobility will be affected by advancing years in the latter half of retirement, and that’s what we need to plan for.

If you want to talk through how to add long-term care provision in your estate planning, contact me for a no-obligation conversation. All my contact details are at the end of this blog.


“Nominal” daily living costs in care homes

The government have set a national “nominal” amount for the daily living costs (DLCs) for care home residents, which is “the equivalent of £200 per week in 2021 to 2022 prices.”

These DLCs cover essential such as:

  • Rent
  • Food
  • Utility bills


Predictable pricing?

The government says that:

“As a result of this new cap, people will no longer face unpredictable or unlimited care costs.”

However, that’s not strictly applicable to everyone. “Unpredictable” rates are very much the name of the game whether considering private health insurance, home care or residential care.

Despite the reassurance that “Self-funders are able to ask their Local Authority to arrange their care for them so that they can find better value care”, there is no guarantee that the local authority will have the capacity or the level of care required.

So, there will still be reliance on and a requirement for the private sector, where prices do vary. factor in the increased costs care homes themselves will need to factor in, such as rises in energy costs, the extra costs of overseas recruitment, and the sheer lack of carers available. At the time of writing, there were nearly 15,500 care home jobs advertised on job site Indeed.


New means testing

The October 2023 changes also include changes for the means-testing system:

“From October 2023, anyone with assets of less than £20,000 will not have to make any contribution for their care from their savings or the value of their home … Anyone with assets of between £20,000 and £100,000 will be eligible for some means-tested support.”

Exactly what these means tests will cover has not been specified.


Contribution, levy, uplift or tax?

The Health and Social Care Levy is basically an increase in National Insurance rates for those working. As an email from the HMRC in my inbox this morning says:

“We would appreciate your assistance to help your employees understand that the increased National Insurance contribution of 1.25 percentage points from 6 April 2022 is helping fund the NHS, health and social care.”

The HMRC recommend that the phrase used on payslips is “1.25% uplift in NICs funds NHS, health & social care.”

Although this increase will be for just a year, the government website says that:

“From 6 April 2023, the National Insurance contribution rates will go back down to 2021 to 2022 levels, and the levy will become a separate new tax of 1.25%.”

So, an increase in NI contributions is a levy that is described as an uplift and then becomes a tax. Glad that’s all cleared up!


Long-term care planning with Panthera Estate Planning

Planning for long-term care is a sensible element to include on your estate planning. What’s more, once you’ve factored it in, you can largely forget about it until such time as you start to need some extra help. You won’t need to worry that by the time you need to invest in your own care, there’s insufficient financing in place.

If you are at the point when you are going to need care very soon, however, you will be too late for some long-term care planning options.

That’s why many ‘adult children’ come to me for help to plan their parents’ care. They have had the conversation with one or both parents about what care they need. They want to ensure their parents receive the best care possible whilst preserving their parents’ hard-earned assets.

I know this is not always an easy conversation to have. Rest assured, this is where I can really help. I can discuss long-term care provision with your parents and with you, safely and efficiently on Zoom. Sometimes, another voice saying exactly what you’ve said many times to your parents, finally gets the message to sink in!


Contact me, Paul Hammond, to discuss your situation and potential requirements for long-term care, whether as a couple or for yourself.




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